Correlation Between FitLife Brands, and CARDINAL

Can any of the company-specific risk be diversified away by investing in both FitLife Brands, and CARDINAL at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining FitLife Brands, and CARDINAL into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between FitLife Brands, Common and CARDINAL HEALTH INC, you can compare the effects of market volatilities on FitLife Brands, and CARDINAL and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in FitLife Brands, with a short position of CARDINAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of FitLife Brands, and CARDINAL.

Diversification Opportunities for FitLife Brands, and CARDINAL

0.19

Correlation Coefficient

FitLife Brands,  CARDINAL

Average diversification

The 3 months correlation between FitLife and CARDINAL is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding FitLife Brands, Common and CARDINAL HEALTH INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CARDINAL HEALTH INC and FitLife Brands, is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on FitLife Brands, Common are associated (or correlated) with CARDINAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CARDINAL HEALTH INC has no effect on the direction of FitLife Brands, i.e., FitLife Brands, and CARDINAL go up and down completely randomly.

Pair Corralation between FitLife Brands, and CARDINAL

Given the investment horizon of 90 days FitLife Brands, is expected to generate 58.35 times less return on investment than CARDINAL. But when comparing it to its historical volatility, FitLife Brands, Common is 40.24 times less risky than CARDINAL. It trades about 0.07 of its potential returns per unit of risk. CARDINAL HEALTH INC is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  7,908  in CARDINAL HEALTH INC on September 13, 2024 and sell it today you would earn a total of  376.00  from holding CARDINAL HEALTH INC or generate 4.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	69.98%
Values	Daily Returns

FitLife Brands, Common  vs.  CARDINAL HEALTH INC

FitLife Brands, Common

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in FitLife Brands, Common are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable essential indicators, FitLife Brands, is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

CARDINAL HEALTH INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CARDINAL HEALTH INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, CARDINAL is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with FitLife Brands, and CARDINAL

The main advantage of trading using opposite FitLife Brands, and CARDINAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FitLife Brands, position performs unexpectedly, CARDINAL can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in CARDINAL will offset losses from the drop in CARDINAL's long position.

The idea behind FitLife Brands, Common and CARDINAL HEALTH INC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.